The marginal private benefit (MPB) a firm receives for each of up to 8 tons of pollution is given in the table. It does not incur any marginal cost for any ton it emits, and rationally chooses how many of these 8 tons to emit. Each ton emitted imposes a societal cost of $59. MPB of each possible ton of pollution. Q 1 2 3 4 5 6 7 8 MPB $75 $62 $38 $18 $3 $0 $0 $0 Assume a perfectly competitive market for tradable pollution permits, where each permit allows a firm to emit one ton of pollution. The firm currently has 5 pollution permits. If the market price for a pollution permit is $12.50, how many tons does the firm emit? Round to two decimal places and do not enter the currency symbol. If your answer is $1.125, enter 1.13. 21

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Chapter1: Making Economics Decisions
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The marginal private benefit (MPB) a firm receives for each of up to 8 tons of pollution is given in the table. It does not incur any marginal cost for any ton it
emits, and rationally chooses how many of these 8 tons to emit. Each ton emitted imposes a societal cost of $59.
MPB of each possible ton of pollution.
7 8
MPB $75 $62 $38 $18 $3 $0 $o $O
Q
1
2
3
4
6
Assume a perfectly competitive market for tradable pollution permits, where each permit allows a firm to emit one ton of pollution. The firm currently has 5
pollution permits. If the market price for a pollution permit is $12.50, how many tons does the firm emit?
Round to two decimal places and do not enter the currency symbol. If your answer is $1.125, enter 1.13.
2|
Transcribed Image Text:The marginal private benefit (MPB) a firm receives for each of up to 8 tons of pollution is given in the table. It does not incur any marginal cost for any ton it emits, and rationally chooses how many of these 8 tons to emit. Each ton emitted imposes a societal cost of $59. MPB of each possible ton of pollution. 7 8 MPB $75 $62 $38 $18 $3 $0 $o $O Q 1 2 3 4 6 Assume a perfectly competitive market for tradable pollution permits, where each permit allows a firm to emit one ton of pollution. The firm currently has 5 pollution permits. If the market price for a pollution permit is $12.50, how many tons does the firm emit? Round to two decimal places and do not enter the currency symbol. If your answer is $1.125, enter 1.13. 2|
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